Kansas City Applebee’s Franchisee Closes Eight Locations Amid $8 Million Federal Lawsuit

Kansas City Area Applebee’s Franchisee Shuts Down Eight Locations, Faces Federal Lawsuit

In a surprising turn of events, a Kansas City-area Applebee’s franchisee has suddenly closed eight of its restaurants, leaving employees and loyal customers in the lurch. On October 30, Apple Central KC LLC decided to shut down locations without so much as a heads-up to employees or the franchisor, which has now led to a massive legal battle. The franchisee is being sued for a whopping $8 million in federal court.

The Closure Shock

Local diners are still processing the shock of these closures, which affected several popular spots across the Kansas City area. The locations that closed include:

• 9300 E. 350 Highway in Raytown
• 11000 Metcalf Ave. in Overland Park
• 3404 Rainbow Blvd. in Kansas City, Kansas
• 2912 S. Fourth St. in Leavenworth
• 16110 W. 135th St. in Olathe
• 6800 Johnson Drive in Mission
• 1700 Village West Parkway in Kansas City, Kansas
• 1501 NE Douglas Street in Lee’s Summit

However, two restaurants — one in Blue Springs and another in Gladstone — remain open and unaffected by the lawsuit.

The Chapter 11 Filing

Shortly after the sudden closures, Apple Central KC filed for Chapter 11 bankruptcy in the District of Kansas. The bankruptcy filing indicates that the franchisee has assets ranging from $1 million to $10 million while liabilities may reach anywhere from $10 million to $50 million. Additionally, Apple Central KC claims to have between 200 and 999 creditors.

The Lawsuit Details

Applebee’s Franchisor LLC is leading the charge in this legal battle, claiming that it could soon become Apple Central KC’s largest creditor. The lawsuit uncovers that the franchisee had entered into long-term agreements—20-year contracts for most locations—with the franchisor. The exception is the Metcalf Avenue restaurant, which has a contract lasting until late 2027. The troubling point for Applebee’s Franchisor is that these agreements explicitly require the franchisee to get prior approval before shutting down any location before the end of the contract. It seems that Apple Central KC failed to fulfill this contractual obligation.

Financial Fallout

The lawsuit alleges that the franchisee’s abrupt closing of these restaurants has led to significant financial losses for Applebee’s Franchisor. According to their claims, damages amounting to approximately $4.48 million have arisen from unpaid royalties and advertising fees. To add insult to injury, the franchisee also left unpaid rent for the properties, which has contributed an additional $3.6 million in damages, bringing the total to around $8.08 million — not to mention they may also be liable for courts costs and legal fees.

Applebee’s Response

In a response to the situation, Tony Moralejo, the president of Applebee’s, called the situation unfortunate. He expressed that Kansas City is still a key market for the restaurant and that the company is actively exploring options regarding its presence in the area. Meanwhile, attempts to reach representatives from Apple Central KC have proven unsuccessful, as their office remains unanswered, and their website is currently down.

What’s Next?

As this court case unfolds, the future of dining at Applebee’s in Kansas City remains uncertain. Local diners hope for a resolution that could revive their favorite eateries, while many are left pondering where they might grab their next plate of Boneless Wings.